Report On CEA Show Point Of Inflection In 2027 Amid Rising Bankruptcy Rate
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Report On CEA Show Point Of Inflection In 2027 Amid Rising Bankruptcy Rate
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Exploring the Latest Developments in Indoor Farming with Artechno Growsystems
Hello there! Welcome to This Week in Indoor Farming, where we bring you the latest news and updates in controlled environment agriculture. In this week's roundup, we'll discuss the recent stock performance of indoor farming companies and some exciting developments in the industry.
We'll also be taking a closer look at Accenture's 2023 CEA study, which explores the opportunities and challenges of controlled environment agriculture.
So sit back, relax, and let's dive in!
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This Week’s Editorial:
This Week in Indoor Farming
Accenture, a global professional services company, recently published its 2023 Controlled Environment Agriculture (CEA) study, authored by Matt Ritchie, Jaime Guerrero, and Gaurav Sharma. The report, which features insights and input from industry leaders such as David Rosenberg, Andrew Loyd, Tobias Peggs, and Dr. Paul Gauthier, discusses the opportunities and challenges CEA companies face in the quest for more efficient and sustainable farming practices.
CEA, which includes technologies like hydroponics, aquaponics, and vertical farming, has attracted significant interest as the world seeks alternative agricultural methods to address growing food demands and environmental concerns. However, the industry faces substantial challenges, particularly concerning the cost of operations and the need for diversified, cost-effective crop production. The Accenture report builds on data from a 2017-2018 survey in New York City, which found that producing a kilogram of lettuce costs $2.68 on the field, $6.76 in a greenhouse, and $7.26 in a vertical farm.
Despite these challenges, the report remains optimistic about the industry’s ability to overcome them by investing in renewable energies, artificial intelligence, and innovations in LED products and plant science. With expected improvements in the cost of renewable energies, increased LED energy efficiency, and breakthroughs in plant sciences, the report predicts that the CEA industry will become competitive against traditional agriculture as early as 2027. From that inflection point onwards, the adoption of tier 2 crops is expected to accelerate across various CEA formats. In addition, the growth and development of tier 2 crops will further boost the industry’s competitiveness by providing more diversified and cost-effective produce options.
Kalera, a vertical farming company headquartered in Orlando, Florida, has filed a voluntary petition under Chapter 11 of Title 11 of the United States Code seeking relief under the Bankruptcy Code. The filing was made through the Company’s wholly-owned and primary operating subsidiary, Kalera, Inc. The company will continue to operate its business as “debtor-in-possession” under the jurisdiction of the Bankruptcy Court and will file various “First-Day” motions with the Court requesting customary relief that will enable Kalera to transition into Chapter 11 without disruption to its ordinary course operations.
Kalera intends to use the court-supervised process to evaluate strategic alternatives for its business and assets, including a potential sale of Kalera or its assets. Mark Shapiro, Senior Managing Director at B. Riley Advisory Services, has been appointed the Chief Restructuring Officer for Kalera PLC in connection with the filing. Shapiro stated, “The Chapter 11 process will allow Kalera to continue operations and serve its existing customer base while evaluating strategic alternatives for its business and assets.”
To enable Kalera to continue operations during the reorganization process, the company’s existing lender has agreed to provide Kalera with $5.1 million of debtor-in-possession (DIP) financing, subject to the satisfaction of certain customary conditions, including the approval of the Bankruptcy Court (which has not been obtained at this time).